EXCLUSIVE: Peppertree Capital Management caught up in corruption scandal, whistleblower alleges
Following high-profile arrests of two lawyers by Guatemala’s public prosecutor on corruption charges, new information leaked to the press alleges a direct financial connection to an American private equity firm based in Ohio, Peppertree Capital Management.
According to local media reports, the lawyers, Juan Miguel Ordoñez Zea y Julia Cristina González Vizcaíno, were arrested on Sept. 2, 2021 and accused of having plundered more than $7.5 million dollars in a corruption scheme involving a series of non-governmental organizations. The arrests and charges are part of a sprawling legal affair known as the “Banco de Crédito” case, one of the country’s biggest corruption cases in recent years. And now, with the involvement of an American investor, could entail expanded enforcement efforts under the Foreign Corrupt Practices Act (FCPA).
According to internal documents and testimony leaked to News Zoom Click by a whistleblower confirmed to be a former employee of Peppertree, the company has allegedly been paying a salary of $13,320 every month to their executive Jorge Gaitan Castro, and to his subordinate Carol Echeverria, a monthly salary of $7,840, who in turn have allegedly been funneling this money into the Banco de Crédito scheme operated by their appointed legal counsel, Ordoñez Zea and González Vizcaíno at the law firm of Aguilar & Aguilar.
Both Gaitan and Echeverria have confirmed that Peppertree is their employer, according to court records viewed by News Zoom Click.
Documents shared by the whistleblower included letters from a company where Gaitan was employed, disavowing his involvement in their operations and warning investors at Peppertree that they were allegedly funding unlawful activity and could be liable in US courts. Nevertheless, even after these facts were revealed internally, Peppertree continued to employ Gaitan Castro as part of a scheme to allegedly seize control of the company, sources say.
According to a legal opinion shared with News Zoom Click, Mr. Gaitan, “has allegedly committed crimes in several countries.”
The legal opinion states: “In fact, Mr. Gaitán has been criminally denounced for the commission of the crime of aggravated theft, ideological falsehood, use of information, destruction of computer records and illicit association before the Tenth Court of First Criminal Instance for Drug Trafficking and Crimes against the Environment in Guatemala.”
Additionally, the whistleblower shared further correspondence sent to company shareholders, expressing the group’s profound concerns over the continued employment of Gaitan by Peppertree despite his alleged links to corruption and ongoing investigations. The letter referred to a forensic accounting investigation of Mr. Gaitan which allegedly revealed that he had been “defrauding and embezzling hundreds of thousands of dollars” from the company accounts into his own pockets, which would represent a clear FCPA violation for US law enforcement to investigate.
According to sources consulted, there is a high level of discomfort and frustration with Peppertree’s continued employment of an executive allegedly linked to corruption, which some say builds on a record of unethical business practices across Latin America. The whistleblower from Peppertree indicates that they are motivated to bring all this information forward in an effort to separate themselves from the unlawful activity.
Speaking on the condition of anonymity, the source says the majority of Peppertree’s team strongly disagrees with the position of the fund’s directors in the handling this matter, as executives fear potential liability for criminal prosecution under a future FCPA case. “The decision taken by Peppertree’s directors to continue to stand by this individual is reckless, unnecessary, and inconsistent with the company’s ethics policies – and the rest of us are not going to have our careers ruined because of their misconduct,” the source said.
When contacted, the local telecommunications firm said that they could not comment on this matter. When asked if Mr. Gaitan and Ms. Echeverria were employees of the firm, the representative indicated that those two individuals were no longer employed by the firm. Efforts to obtain comment from Peppertree’s executive leadership were unsuccessful.
News Zoom Click will continue to follow this story closely and encourages other whistleblowers to come forward with further details and revelations of Jorge Gaitan’s involvement in corruption activities and potential Foreign Corrupt Practices Act violations.